Potholes. We have more than our share of them in Michigan after an exceedingly long, harsh winter. We need to repair our roads and repair them soon. These repairs cost money. While the Legislature has approved $100M in immediate funding to make these quick fixes, the Governor has estimated that it will cost another $1.2B per year in additional funding just to keep the roads from getting any worse.
There are many folks in Lansing now rushing to push the “easy button” and solve our road funding shortfall by raising taxes. That certainly is one approach. It is the default approach, however, far too often. Taxpayers should not be treated as piggy banks that we break open whenever we need a quick fix for funding shortfalls. This begs the question…what are some other ways to raise money for roads?
One way to increase money for roads actually is to decrease the amount of money that it costs to construct and repair them. That means that we need to start looking at the expense side of the budget equation and not simply the revenue side. We currently spend $3.3B per year on roads but have need of $4.5B. What if, for example, we could reduce that total budget need to $4B? Instead of raising taxes by $500M, we could put more effort into reducing our maintenance costs by $500M.
Let’s start with a commitment to build roads that last. We may spend a bit more on the initial construction, but we will save money (and commuter frustration) by not needing to put up orange barrels quite as often. When our automotive industry began to show cracks a few decades ago, the Ford Motor Company adopted the slogan “Quality is Job 1”. Other manufacturers adopted a similar priority. Our auto industry has since come back strong. We need that same focus applied to our roads.
Quality improvement needs to be a team effort involving MDOT, county road commissions and the legislature. There is no excuse for roads designed to last 20 years that need to be resurfaced within 3 years of construction. There is no excuse for labor-intensive “throw and roll” pothole fixes that last 2-3 months when there are cost effective patch techniques that last 2-3 years. We need to stop looking at road construction as a “jobs program” driven by the need for steady employment. There are plenty of repairs that need to be done. There will be plenty of road construction jobs in our state for years to come.
In addition to reducing expenses, we also need to recalibrate our spending priorities. As more people are getting back to work in our state, tax revenues are up. Since passing our FY14 budget last year, we have over $1.2B in additional general fund revenue (i.e. money that can be allocated to any budget). Where did that money go? See TenMillionAccountants.com for more information on how your FY14 money was to be spent.
We need to start asking some common sense questions about how your money is being spent. For example, is it more important that we spend your money on film industry incentives or roads? To put this in perspective, would you vote to increase taxes to pay for film incentives?
There are people in Lansing (and DC), though, that believe that the government knows how to spend your money better than you do. It is easy to identify them. Whenever they talk about budgets, they only talk about the revenue side of the ledger. They don’t like to talk about how they are spending the money that you already contribute. These folks do their best to ensure that logical questions around spending priorities are pushed aside in favor of questions with more of an emotional appeal. Our current frustration with the condition of our roads plays right into their hands. We need to resist false narratives that suggest the only way to fix our roads is to raise taxes. For starters, as we continue the development of the FY15 budget, we should be asking if each spending item is more important than fixing our roads. It comes down to priorities.
Appropriations policy is a short-term fix. We need a long-term fix. Focusing on quality will indeed help on the long-term front, but it is not sufficient to get the job done. Getting even more people back to work is the best way to generate additional tax revenue, but I believe that we need to expand our thinking beyond taxpayers when it comes to revenue sources. That means we need to look at other assets within our state as revenue sources.
The National Council of State Legislators has identified advertising, concessions, rights of way and naming rights as viable alternative revenue streams. Many of these alternatives have challenges of their own, but I believe it is time that we finally started to challenge the traditional notion that increased taxes are the only way to generate more revenue.
Please see my Solutions Center for more information on a comprehensive road funding strategy that respects the hard work of our taxpayers. It features more details on the points touched on in this article as well as a pragmatic path towards eventually reducing gas tax surcharges and burdensome registration fees. I welcome your insights on how to make this approach to funding our roads even better. You can contact my office at (517)373-7350 or email@example.com.